Recently, at BrowserStack.com, some of our services got compromised. We use Amazon Web Services extensively. The person (or group) who attacked us mounted one of our backups and managed to steal some of the data. We could have prevented this simply by ensuring that we use encrypted disks which would have made this attack useless. Learning from our mistakes, we have recently started encrypting everything and I am going to show you how to do that.
One point worth noting here is that Amazon AWS does provide encryption support for the EBS volumes but that is transparent and would not help in case of the account getting compromised. I am going to use dm-crypt which is supported by Linux kernel so the steps are quite generic and would work on any kind of disk, on any kind of environment, including Amazon AWS, Google Compute Engine, physical disks in your datacenter.